--UPDATE, ADDS COMMENTS FROM CHIEF EXECUTIVE ANDREW DAY--
Proceeds of the share sale are expected to allow the company to make further selective, value-enhancing acquisitions.
“People should expect us to build upon what we have already, perhaps try to fill in some geographic holes in our global footprint, and extend our service reach a little bit,” chief executive Andrew Day told Proactive Investors.
The reasoning behind today’s funding essentially boils down to prudence and convenience ahead of any likely disruption during the upcoming festive period, he explains.
“We have a fairly active acquisition pipeline, as you would expect from an acquisitive company like ourselves, but, we currently have a number at reasonably advanced stages so we don’t want to be working over the Christmas period trying to get deals funded, so we decided to raise the money now.
“It is important (we have the cash available) as we go into these transactions.”
In keeping with Keywords modus operandi it is likely that any new transactions would likely comprise an element of cash and new Keywords shares (typically it has been around 70% cash, 30% shares).
The fact that Keywords continues along the acquisition trail - having acquired eight businesses since listing on AIM in July 2013 - reflects the success of the strategy thus far, Day explains.
“We’ve been very pleased with the quality of the acquisitions we’ve made, the fact the companies have grown nicely within the umbrella of Keywords.
“And, we’ve been pleased as well with our ability to find the right acquisitions, price them sensibly and most importantly to get them integrated and have done all that without losing the key talents in the businesses we’ve been acquiring.
“Also our clients have reacted really positively to our acquisition strategy.”
“Our business is growing strongly organically and our acquisitions allow us to expand our footprint geographically into the right territories for the services we offer, and also expand our range of services so that clients can use their established relationship with us to source reliable quality services across the video games lifecycle.”
Keywords is issuing 5.5mln new shares priced at 190p each, a fairly modest 6.4% discount to Wednesday’s closing share price of 203p.
The funding is being organised by Numis Securities, and it is to take the form of a ‘cash box’ placing, which means the issue does not require shareholder approval.
It is anticipated that the new shares will be admitted to AIM on November 30.
Day highlighted “strong support” for the placing from both new and existing institutional investors.
“The business continues to perform well and the board anticipates that performance for the remainder of the current financial year will be in line with expectations,” he added.